Let’s discuss how startup could save some amount of raised money. Here we talk about IT startups based in USA or Western Europe as the most well-known areas of entrepreneurship.
Some people say that startup shouldn’t outsource its product development.
Every serious IT startup (IT here means developing innovative soft or creating SaaS website) after bootstrapping phase has several steps on his way:

Get first fundraising money. Here we won’t talk about venture funds or angel investment. If you raised your first money, it means that somebody believed in your idea and a team. Congratulations! But what next?

You should have a business plan where you write all your expenses. We suggest to foreseen some part of them for an outsource team if you didn’t do this on previous stage. Offshore team from Eastern Europe is one of the best money-saving instruments and allow to save up to 2/3 of your originally based development team. Actually, Ukraine, as one of the Eastern Europe countries and is the world’s fifth biggest IT services exporter. So, Ukraine has optimized costs and needed development resources for creating innovative software products.

After prototype has created and you’ve verified your business model you could come back to your investor to raise the next round. To continue partnership with your software outsourcing team is one of good possible ways of business development.

Actually, one of the most successfully CEO Emi Gal from incubator 500startups.com also recommends top 5 myths about distributed teams to use outsourcing teams.